Search - consideration

17 September 2018- 11:18pm CRA confirms that it is possible to structure a P3 project so as to defer the applicability of GST/HST until revenues are ascertained Email this Content Typically, P3 project construction costs for a hospital, bridge etc. are intended for ITA purposes to be viewed as consideration for the grant of a concession or licence (a Class 14 property) by the public authority to the private operating company to enter onto the premises to operate it and earn a monthly operating fee (see e.g., 2006-0218781R3). On the ETA side, CRA instead views the consideration for the incurring of the construction costs as being included in the subsequent monthly amounts payable by the authority. Provided that the amount of such consideration is not yet ascertainable, GST/HST is not triggered (one month after substantial completion) under ETA s. 168(3)(c) on the value of the supply made to the public authority by virtue of the supply of the hospital etc. and is deferred under s. 168(6) until the monthly amounts become ascertainable. ...

., the distribution restriction in s. 74.4(4) was not complied with), the preferred shares received on the refreeze will be excluded consideration that do not reduce the “outstanding amount” (as determined under s. 74.4(3)) on which the deemed interest benefit is computed under s. 74.4(2). If the refrozen preferred shares are redeemed for cash consideration, that consideration will reduce the outstanding amount, but only to the extent of the fair market value of those shares. ...

10 August 2021- 1:55am CRA position accommodating extracting cash on an amalgamation may facilitate surplus stripping Email this Content 2018-0785921E5 and 2017-0696821E5 indicate that where there is a distribution of cash and shares to shareholders of predecessor corporations pursuant to an amalgamation, the conditions of s. 87(1)(c) will be met, while the receipt of the non-share consideration will preclude s. 87(4) from applying, so that such shareholders will realize a capital gain or loss based on the value of the shares and cash received from Amalco. This suggests that surplus of a corporation can be extracted on its amalgamation as cash or other non-share consideration. S. 84(2) risk can be minimized by continuing to operate the businesses of the predecessors and taking the non-share consideration as a note that is drawn down over time. ...

The CRA indicated that the monthly equipment rental fees paid by the merchant to DeviceCo were consideration for taxable supplies by DeviceCo. However, the fees paid by the merchant under the Service Agreement were regarded as consideration for the processing of credit and debit card payments within the payments network and, thus, as consideration for exempt supplies of financial services. ...

Bundle Date Translated severed letter Summaries under Summary descriptor 2012-04-27 17 April 2012 External T.I. 2011-0427411E5 F- Bien de remplacement-immobilisation admissible Income Tax Act- Section 14- Subsection 14(7) shares cannot be replacement property 17 April 2012 External T.I. 2012-0440931E5 F- Crédit d'impôt pour frais médicaux Income Tax Regulations- Regulation 5700- Section 5700- Paragraph 5700(i) motorized stationary bicycle did not qualify 2012-04-20 10 April 2012 External T.I. 2011-0428701E5 F- Lien de dépendance- commanditaire et SEC Income Tax Act- Section 251- Subsection 251(1)- Paragraph 251(1)(c) limited partner at arm's length with LP if it has no management authority 10 April 2012 Internal T.I. 2011-0430291I7 F- Montant d'aide versé par la SAAQ à un conjoint Income Tax Act- Section 3- Business Source/Reasonable Expectation of Profit automobile insurance payments received for care of injured spouse were non-taxable 3 April 2012 External T.I. 2011-0426341E5 F- Catégories 29 et 43 Income Tax Regulations- Schedules- Schedule II- Class 29 scrap metal shearing device and container for sliced metal described in Class 29 2011-04-01 23 March 2011 Internal T.I. 2010-0389081I7 F- Disposition of a resource property Income Tax Act- Section 54- Proceeds of Disposition- Paragraph (a) proceeds included full (undiscounted) deferred cash proceeds, but might exclude share consideration (with volatile market price) until issued Income Tax Act- Section 12- Subsection 12(1)- Paragraph 12(1)(g) deferred share consideration potentially not recognized until issuance Income Tax Act- Section 12- Subsection 12(1)- Paragraph 12(1)(b) full undiscounted amount of future cash consideration to be included as an amount receivable Income Tax Act- Section 66.2- Subsection 66.2(5)- cumulative Canadian development expense- Element F proceeds from mineral claims sale included undiscounted deferred cash proceeds, but might exclude share consideration until issued; purchaser’s CEE obligation excluded ...

R & S then appealed to the Tax Court with a view to convincing the Court that the allocation of consideration between partnership-interest and non-partnership interest consideration set out on the (T2059) election form did not reflect the actual agreed allocation. ... Graham J considered that there was a crucial distinction between the T2059’s agreed amounts, which could not be altered by the Minister, and the allocation of the consideration, which was a purely factual matter which was merely recorded on the T2059, and which either CRA or the taxpayer were free to challenge in the Tax Court as not according with the actual facts. ...

24 August 2017- 1:36am CRA considers the HST questions of who has acquired a service or property, and who is the recipient of a supply, to be cognate Email this Content The definition in the ETA of the “recipient” of a supply refers to the person who, under the agreement for a supply, is liable to pay the consideration therefor. CRA indicated that it did not consider someone to be the recipient of a supply merely because that someone was contractually liable to pay the consideration for the supply. ... The [recipient] definition refers to ‘consideration for the supply’. However, in the present case, the [Lessor] has not acquired any supply of software licences, and is therefore not entitled to claim any ITC for the tax paid for them. ...

It seemed likely, but unclear, to CRA, based on the limited information provided to it, that such charges were consideration for the service of the Funds in redeeming the units and, therefore, were exempted under para. (d) of the financial services definition as being consideration for the “transfer of ownership” of financial instruments (i.e., it apparently was sufficient that the unitholders ceased to be owners and that it did not matter that there was no new owner of the units). If, on the other hand, the redemption fees were consideration payable to the Fund manager for its service of “arranging for” the “transfer of ownership” of the units, CRA indicated that this created the possibility that such redemption fees were part of a single supply of taxable management services made by the manager (pursuant to a management agreement between it and the unitholders) for periodic management fees. ...

22 April 2021- 11:04pm CRA indicates that comparable sales of used MURCs for s. 191(3) purposes may reflect embedded GST/HST Email this Content In the context of an inquiry on determining the fair market value of a new apartment building (or other ”MURC”) when there is a self-supply at the time of substantial completion and first occupancy, CRA noted that where the cap rate used in applying the income approach to valuing the MURC was derived from comparable sales of occupied MURCs, such comparables may reflect “GST/HST that may be imbedded in the consideration for a supply as a result of the GST/HST having been imposed at an earlier time.” On the other hand, “where the consideration of a taxable supply of a residential complex is used as a comparable in a valuation methodology, the GST/HST imposed on that supply, even where the supply was ‘GST/HST included’, is excluded from the consideration.” ...

Upon its renewal, the policy is transferred to the employee for no consideration under s. 148(7), whereupon the employee starts paying the annual premiums. Given that the key employee has been including the annual premium in income as a s. 6(1)(a) benefit, does a further benefit arise on such transfer of the policy to the individual for no consideration? CRA indicated that s. 6(1) “may apply to include in the income of the individual the amount by which the fair market value of the policy exceeds any actual consideration paid by the individual for the policy.” ...